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USDA announces loan rates for corn, soybeans et al

Department officials said the announcement revises the loan rates for canola, flaxseed, mustard seed, rapeseed and safflower as specified in the Consolidated Appropriations Resolution, 2003 or omnibus appropriations bill but does not affect the loan rates for wheat, barley, and oats.

They noted the end of February announcement of the corn, grain sorghum and soybean county loan rates is the earliest in recent history. The 2003-crop loan rates for wheat, barley, oats and other oilseeds were previously announced on Dec. 13, 2002.

The Farm Security and Rural Investment Act of 2002 restructured national loan rates, thus requiring changes in county loan rates.

“The Conference Report accompanying the 2002 farm bill also provided guidance suggesting that USDA use the generally upward change in national loan rates to revise county loan rates,” a spokesman said.

“Because county loan rates had not been adjusted to reflect changing grain market conditions for over 10 years, numerous disparities between loan rates and market prices had emerged, affecting producer benefits. Almost immediately upon enactment of the 2002 Bill, USDA announced the most comprehensive adjustments in more than 15 years to the county loan rate structure for 2002 crops.

“The new rates were intended to reflect market factors affecting each crop to the fullest extent possible and thus avoid distortions that work to the detriment of producers and the industry.”

The spokesman said the 2003-crop county loan rate determinations are in keeping with this market-oriented approach. “The relative levels of the 2003-crop county loan rates for each commodity reflect the most recent information available about price relationships around the country,” he said. “The 2003-crop rates will enhance the market orientation of the loan and loan deficiency payment (LDP) programs.”

The new loan rates also reflect efforts to eliminate some “cross-border” differences that remained from last spring’s extensive revisions.

“For corn, the situation was particularly notable along the Minnesota-Iowa border,” the spokesman said. “This announcement of the 2003-crop county loan rates is in response to producers’ concerns regarding these differences and reflects the most recent information on cross-border differences in market price relationships.”

While some cross-border differences will continue because of certain market conditions, the spokesman said, the actions will reduce and, in some instances, eliminate many of the unwarranted differences.

In establishing this year’s rates, the spokesman said USDA analysts paid special attention to reducing notable loan rate differences among neighboring counties that are not the result of current market forces. “These updated county loan rates reflect changes that have occurred in cropping and marketing patterns over the years and should be highly beneficial to most farmers.”

USDA had been criticized in the Midwest for perceived loan rate discrepancies for pulse-crop commodities. Those were addressed in the 2003 omnibus spending bill, the spokesman said.

“In accordance with the Consolidated Appropriations Resolution, 2003 (the 2003 Act), signed on Feb. 20, base quality levels for the 2003-crop pulse commodities will be feed grade for dry peas and No. 3 grade for lentils and small chickpeas,” the spokesman said. “Also, 2003-crop dry pea loan rates will be differentiated by region in accordance with the 2002 farm bill’s congressional conferees’ guidance.

The 2003-crop dry pea national loan rate is $6.33 per hundredweight. “Dry pea production is regionally dispersed and season average farm prices are significantly different among regions,” the spokesman said. “The 2003-crop regional loan rates will apply uniformly to feed grade dry peas throughout all counties within each region.”

The 2003-crop lentil national loan rate of $11.94 per hundredweight will apply uniformly to No. 3 grade quality in all counties in the nation. The 2003-crop small chickpea national loan rate of $7.56 per hundredweight will apply uniformly in all counties in the nation to No. 3 grade chickpeas that pass through a 20/64 grading screen.

Also, consistent with the 2003 Act, the 2002- and 2003-crop loan rates for crambe and sesame seed are set at 96 cents per pound. This announcement makes producers on farms with a history of planting crambe or sesame seed during 1998-2001 eligible for the direct and counter-cyclical payment programs. The 2003-crop national average loan rates for canola, flaxseed, mustard seed, rapeseed and safflower also are revised to 96 cents per pound.